Got Money? You're a Prime Target for Identity Thieves

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It may be a sign of the grim economic times, but crooks, cyber
and otherwise, are zeroing in on affluent individuals.

The phenomenon even has a name, Affluent Identity Theft, said
Neal O'Farrell, executive director of the Identity Theft Council
in Walnut Creek, Calif., and a consumer-security expert.

People with more money aren't at greater risk of
identity theft just because they have more to lose then the
average consumer, O'Farrell said. They're often more vulnerable
as well.

"In the last 18 months to two years, I've seen, through the
Identity Theft Council and separately, a constant pick-up in
cases of identity thieves targeting high-net-worth individuals,"
O'Farrell said.

"A lot of inquiries [to the Identity Theft Council] were coming
from their lawyers and financial advisers — almost rising to a
panic in some cases," he said. "There were a couple of
organizations I dealt with that had multiple victims of identity
theft who were all higher-net-worth and all deliberately
targeted."

In most cases, the identity thieves who targeted these affluent
individuals were pretty well-organized, O'Farrell recounted. They
seemed to have researched their targets thoroughly.

"The research was a combination of what was available publicly,
as well as what we call 'gentle attacks,'" O'Farrell said. "Going
through their mail, trying to
hack into their accounts. Not necessarily global organized
crime, but I would call it more local organized street crime."

So what makes these high-net-worth people (defined as those with
at least $1 million or more of net worth, excluding the family
residence) more appealing — aside from all their money — and more
accessible than the average consumers?

O'Farrell said there are three main reasons these people are
being targeted.

They have a lot of credit, and they're not good at
protecting it.

"It's a mixture of they're too busy and a little bit of
arrogance," O'Farrell said. "They think, 'No one would dare
target me. Don't they know who I am?' or 'I have lawyers to deal
with it.'"

They often have a large number of accounts with high
amounts on deposit, so it's that much harder for them to protect
themselves.

"The average consumer might have just one or two
bank accounts (a checking and savings); a higher-net-worth
target could have as many as 15 to 20 different accounts,"
O'Farrell said.

"They could have business accounts, brokerage accounts,
investment accounts, and even trust funds for the kids and
grandkids," he said. "Multiply that by a factor of 10 — the
number of accounts that need protecting, the number of
passwords that need protecting. And rather than take on that
task, they just tended to ignore it.

They have too many points of access and
vulnerability.

"High-net-worth individuals tend to have too many people around
them," O'Farrell said. "They have secretaries, direct employees,
admin staff, personal financial advisers, legal advisers. And
each one of those represents a point of vulnerability. They're
people who can be exploited."

Additionally, O'Farrell said, if these people become victims of
identity theft, they're very hesitant to go to the authorities
because of the publicity that might result. They just want to
make it go away as soon as possible and write it off as a bad
experience — something the bad guys are aware of.

O'Farrell said there are a few things high-net-worth individuals
can do to protect themselves and their money.

Take the security of their identities more seriously and
more personally.

"They shouldn't make the mistake of assuming it won't happen to
them or, if it does, a lawyer will fix it, because there's no
lawyer who can fix it," he said. "These people [the identity
thieves] disappear into thin air, and police won't investigate
them and prosecutors won't prosecute."

Be very careful about their bank accounts.

"They need to have almost a routine for updating the security of
those accounts," O'Farrell said.

Ensure everyone around them is aware of identity
security.

"All the people around them have to be very wary of every call
they get," he said. "They have to think security first. That
means they have to be very suspicious about any
emails that they get, especially ones with attachments. They
have to double-check everything."

Take the same precautions as the average
consumer.

"Checking their
credit reports, freezing their credit reports, shredding
their personal information, being careful with their mail,"
O'Farrell said.

"Rich people are like us, except they have a lot of money. And
when it comes to security, it's the same security as the rest of
us, plus an extra layer."